Adam Davidson, CEO of Trident Royalties, discusses offtake milestones and catalysts to boost FY24. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Vauxhall depending on equity in play eps 0.06 should be possible from Araguaia p1+p2 as long as nickel plays ball and gets to the $16-18k/t range in due course, without Vermelho. Depends on the total shares in issue of course. In early years 1-2p might be realidtic during capex payback but I am very much hoping to see 3-5p ie original investment price back yoy in future years. But we will see! My sp targrt at that point is less ambitious at 30p+ but again completely ignores Vermelho. The reason I tend to Vermelho in all calcs at the moment is a few reasons - it seems unlikely that we will develop it without a partner so its hard to predict what % retained, secondly I dont know what price premium the sulphate/cobalt intermediate if thats what we produce will fetch - my guess at the moment is in time a slightly different pricing mechanism might emerge for the intermediate products able to be used for batteries. The premium this might command above standard nickel pricing is anybody's guess I think - depends on the ev uptake rate and mine development rates to fulfill the demand I guess.
But very much believe in your mid term targets I am hoping for 7-10p at least at financing complete then 15-20p on first production at Araguaia. Any progress at all at Vermelho presents upside to those numbers. Gla
Lol, I’m just a Retired Architect, so best not take Mining technical assessments from me. (Especially with my dyslexia and word blindness).
Thanks all for the advice on the PE ratio to use etc.
I'm thinking more long term divi in my SiPP if it gets as far as producing from stage1,. State2 and Vermelho. EPS of 0.06 is my min estimate for all 3 when producing and I have assumed 1/3 of that returned as a divi. (ie 2p per share) . A divi of that size would support a mature business SP with long mine life, working on a 3% yield giving a SP of around 66p.
For now though, 10p on funding completion, 20p on first production. (Obviously more if in the construction time Vermelho advances as it almost certainly will)
You are welcome. thankfully you have the technical knowledge to share the hyperlink.
Thanks WaitingRoom.
Good set of information in that document
https://horizonteminerals.com/news/en_20200814-hzm-q2-mda.pdf
Just in case it has been overlooked; there is also a comprehensive management discussion document on the HZM website. Some recap info in there as well.
Well done VauxhallViva on your recent adds. Good to see peeps feeling positive on the stock. I’m coming up to 4years from my initial holding here and have added more and more along the way. Nowhere near wassarunner, djryan, craigieboy or a few others on here, but very happy with my holding and feel more and more confident of where we are heading.
As an aside. At my first AGM (only around 8-10 attendees) sat next to a chap who had an average price of around 8p, so you guess how long he was invested for. Know of others who’ve been in for 8years odd. Figure everyone invested will do rather well here, but then I would say that.
Good luck all holders
Vauxhall nice post just one comment -I generally asdume a lower valuation for a miner as the underlying commodities are volatile (ignoring the nickel boom here/ev etc) and look at 5-10x on p/e rsther thzn the 10/20x in other sectors. Happy to be corrected though? From what I have seen the majors tend to trade on lower p/e valuations but then their shareprices are also quite volatile with the commodity cycles they mine in.
Morning All,
It's been a great week so far and I've added to my initially small HZM holding 3 times since the $325m RNS and now am at approx 0.5m shares.
Intend to add more as and when funds allow, on the following valuation basis for stage 1 Araguaia alone;
*Assuming worst case scenario for the remaining equity raise - $125m needed = £95.5m (use say £10.5m) from cash reserves so need to raise £85m for construction to begin in Q1 2021. Note: I say worst case as I actually think that there may be some more debt finance to come from local Brazilian banks.
* The £85m I have assumed will be at 10p per share (As Orion have previously been happy to invest at for royalty purposes), so 850m new shares issued (maximum), making total shares 2.3bn.
*From HZM website, the investor presentation forecasts the average PBT for stage 1 Araguaia to be $94m per annum. (This is based on 16.4k Nickel but also 3.5 Real to USD - a situation which has changed markedly since Real devaluation and I therefore assume even at 14.3k Nickel currently (and rising), the margin of this project would already be achieved).
*I've taken a Brazilian tax rate of 34% leaving profit after tax of $62m (£47.5m).
*EPS would therefore be just over 2p per share on average annually from this stage of the project.
*Taking a PE of between 10 and 20 as a ballpark gives a mkt cap of £475m to £950m and a SP of 20.7 to 41.4
Of course a SP of between 20p and 40p per share is just the start. With stage 2 Araguaia and crucially Vermehlo to come on stream in subsequent years, then I see a SP in the range 60 to 100 depending on just how crazy the Nickel price gets when 8:1:1 batteries are being screamed for in a hot incentivised EV market.